The life cover a breadwinner needs, net of savings and benefits.
Coverage to buy
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Income replacement
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Debts + goals
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Less assets
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What a coverage figure is really trying to replace
Life insurance for a breadwinner is not about a round number that sounds reassuring. It is about the specific gap your family would face if your income stopped tomorrow. This calculator builds that gap from the pieces that actually matter: the income your household would need to replace for a stretch of years, the debts someone would have to clear, a big future goal such as a children's education fund, and then it subtracts what your family would already have to lean on.
The logic runs in three moves. Add up the future need, count the assets and benefits that already exist, and the difference is roughly the new cover to buy. If you already hold enough, the tool tells you the gap is zero. The point is to size a policy to your real situation rather than to a sales target.
Where SSS fits into the picture
One input deserves attention because Filipino families often forget it: the Social Security System (SSS) death benefit. If you are an SSS member, your qualified dependents may receive a benefit when you pass, either as a monthly pension or a lump sum depending on your contributions. That benefit reduces the private cover you need to buy, which is why the tool gives it its own line. The amount depends on your contribution record, so check your figure with the SSS rather than guessing. If you are unsure, leaving it at zero simply gives you a more cautious, larger estimate.
How many years of income to replace
The years-to-replace input quietly does the heaviest lifting in the result, so choose it with care. Pick the number of years until your situation would stabilise, not blindly until retirement. Many Filipino families choose the years until the youngest child finishes schooling, or until a surviving spouse could realistically return to full earning, or until the mortgage is cleared. Replacing 10 years of income is a common starting point, but a household with very young children and a single earner often wants more, while a near-empty-nest couple with grown, working children may need far less. If both partners earn, replace only the share of income the household would actually lose, not the full combined figure. Adjusting this one number up or down a few years moves the coverage estimate by hundreds of thousands of pesos, so it is worth a moment's honest thought rather than a round guess.
Working through a single-earner household
Take the defaults the tool loads: an annual income of PHP 600,000, replaced for 10 years, outstanding debts of PHP 1,500,000, an education fund target of PHP 2,000,000, existing coverage of PHP 500,000, liquid savings of PHP 300,000, and no SSS death benefit entered. The gap falls out like this.
| Component | Amount |
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So this household has a PHP 8.7 million gap. The chart below stacks the need on the left against the assets that offset it, with the uncovered gap shown in dark. Notice how small the existing PHP 800,000 of assets looks next to a PHP 9.5 million total need. That mismatch is the case for buying cover while it is affordable.
Are the proceeds taxed when my family receives them?
Generally, life insurance proceeds paid to a named beneficiary are treated favourably. When a specific beneficiary is irrevocably designated, the proceeds are typically received outside income tax and outside the taxable estate, which means your family gets the full face amount to use. If the estate itself is the beneficiary, the treatment differs. This is exactly the kind of detail worth confirming with the Bureau of Internal Revenue (BIR) and with your insurer when you set up the policy, because the beneficiary designation drives the outcome.
Should I include my house or car as an asset here?
Be careful. The savings line is for liquid money your family could actually spend, not for property they live in or depend on. A home is rarely something a grieving family wants to sell quickly, and a car is a depreciating necessity. Counting illiquid assets here understates the cover you genuinely need, so keep this line to cash, deposits, and investments that can be turned into money without disrupting daily life.